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If Your lambda function didn't required to call third party services like firebase or payment gateways etc, you can configure it to use default aws vpc which don't have internet access.
But If you required to have internet access as well in VPC , you need to set up NAT (
network address translation gateway) , IGW (
internet gateway) , Route Tables with their subnets as attachments.
Note : Some of these services are chargeable .
Here is step by step guide to setup lambda for second case.
We going to have total 3 Subnets. 2 Private subnet and 1 public subnet.
In Lambda Function > Configuration > VPC > Subnets we going to have only two private subnets selected. public subnet won't be selected here.
1) Lets say your default vpc has private ip address as 192.168.0.0/16. or create new one.
2) Create Private Subnets :
Go to AWS VPC > Subnets > Create two private subnets with CIDR as 192.168.20.0/24 and 192.168.30.0/24